Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2011

Sales And Use Tax Regulations

Article 17. Payment and Collection of Use Tax

Regulation 1685.5

Regulation 1685.5
Calculation of Estimated Use Tax–Use Tax Table.

Reference: Section 6452.1, Revenue and Taxation Code.

(a) IN GENERAL. The Board of Equalization (BOE) is required
to annually calculate the estimated amount of use tax due according to a persons adjusted gross income (AGI) and make such
amounts available to the Franchise Tax Board (FTB), by July 30 of each year, in the form of a use tax table for inclusion
in the instructions to the FTB's returns.

(2) USE TAX LIABILITY FACTOR OR USE TAX TABLE PERCENTAGE. For the 2011 calendar year the use tax
liability factor or use tax table percentage shall be 0.070 percent (.0007). On May 1, 2012, and each May 1 thereafter,
the BOE shall calculate the use tax liability factor or use tax table percentage for the current calendar year by
multiplying the percentage of income spent on electronic and mail order purchases for the proceeding calendar year by 0.37,
multiplying the product by the average state, local, and district sales and use tax rate, and then rounding the result to
the nearest thousandth of a percent.

(3) TOTAL PERSONAL INCOME. Total personal income shall be determined by reference to the most current
personal income data published by the United States Bureau of Economic Analysis.

(4) TOTAL SPENDING AT ELECTRONIC SHOPPING AND MAIL ORDER HOUSES. Total spending at electronic shopping
and mail order houses shall be determined by reference to the most current electronic shopping and mail order house spending
data published by the United States Census Bureau.

(5) PERCENTAGE OF INCOME SPENT ON ELECTRONIC AND MAIL ORDER PURCHASES. The percentage of income spent on
electronic and mail order purchases during a calendar year shall be calculated by dividing the total spending at electronic
shopping and mail order houses for that year by the total personal income for that year, multiplying the result by 100, and
rounding the result to the nearest tenth of a percent.

(6) AVERAGE STATE, LOCAL, AND DISTRICT SALES AND USE TAX RATE. The average state, local, and district sales
and use tax rate for a calendar year shall be the total of:

(A) The rates of the statewide sales and use taxes imposed under section 35
of article XIII of the California Constitution and the Sales and Use Tax Law (Rev. & Tax. Code, § 6001 et seq.) in effect on
January 1 of that year;

(B) The statewide rate of local tax imposed under the Bradley-Burns
Uniform Local Sales and Use Tax Law (Rev. & Tax. Code, § 7200 et seq.) in effect on January 1 of that year; and

(C) The weighted average rate of the district taxes imposed under the
Transactions and Use Tax Law (Rev. & Tax Code, § 7251 et seq.) in effect in the various jurisdictions throughout the state
on January 1 of that year after taking into account the proportion of the total statewide taxable transactions (by dollar)
reported for each jurisdiction during the fourth quarter of the calendar year that is two years prior to the calendar year
for which the calculation is made. For example, the total reported taxable transactions (by dollar) for the fourth quarter
of 2010 shall be used to determine the weighted average rate of the district tax rates in effect on January 1, 2012, to
calculate the weighted average rate of district taxes for calendar year 2012.

(c) CALCULATION OF THE ESTIMATED USE TAX LIABILITY.

(1) The estimated use tax liability for the AGI range described in subdivision (b)(1)(A) shall be determined
by multiplying $10,000 by the use tax liability factor or use tax table percentage and then rounding the result to the nearest
whole dollar.

(2) The estimated use tax liability for the AGI ranges described in subdivision (b)(1)(B) through (G) shall
be determined by multiplying the midpoint of each AGI range by the use tax liability factor or use tax table percentage and
then rounding the result to the nearest whole dollar.

(3) The estimated use tax liability for the AGI range described in subdivision (b)(1)(H) shall be determined
by multiplying each range members actual AGI by the use tax liability factor or use tax table percentage and then rounding the
result to the nearest whole dollar.

(d) USE TAX TABLE FORMAT.

(1) The use tax table for calendar year 2011 shall provide as follows:

Adjusted Gross Income (AGI) Range:

Use Tax Liability

Less Than $20,000

$7

$20,000 to $39,999

$21

$40,000 to $59,999

$35

$60,000 to $79,999

$49

$80,000 to $99,999

$63

$100,000 to $149,999

$88

$150,000 to $199,999

$123

More than $199,999 -Multiply AGI by 0.070% (.0007)

(2) The use tax tables for calendar year 2012 and subsequent years shall
utilize the same format as the
use tax table for calendar year 2011.